The pace of seasonally adjusted existing-home sales in the U.S. rose 5.0 percent from a revised 4.39 million in November to a 4.61 million pace in December, up 3.6 percent from the 4.45 million unit pace recorded in December 2010.
Total housing inventory at the end of December fell 9.2 percent to 2.38 million existing homes actively on the market, a 6.2 month supply, down from a 7.2 month supply in November and versus an 8.1 month supply in December 2010.
While demand appears to have increased, and supply appears to have declined, the median sale price for existing-homes was down 2.5 percent year-over-year in December to $164,500 as distressed sales accounted for 32 percent of sales volume, up three points from last month but down three points year-over-year.
Existing-home sales in the west increased 2.6 percent from November to December, down 0.8 percent year-over-year with a median sales price that’s up 0.3 percent.
∙ December Existing-Home Sales Show Uptrend [realtor.org]
∙ From Bad To Worse And Business As Usual At NAR [SocketSite]

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Comments from “Plugged-In” Readers

Supply drops, prices drop, and the number of commenters plummets!
Used house salespeople, developers, and banksters point to the immutable law of supply and demand to justify the bubbles that make them rich. Curious that now prices are falling in concert with supply?
The reason supply is falling is that the banks are sitting on 3.5 MILLION foreclosed homes, with many, many more to come. The banks are trying to prevent total hemorrhaging of the home market by metering out homes onto the market. This is a total violation of the law of supply and demand which supposedly underlies the supposedly free market of housing. Until market clearing prices are approached, home prices will continue to fall. At this rate, it could take DECADES until housing recovers.
Of course, if this post was about a minor INCREASE in prices, this comments section would be jammed with gloating fart-noises from the usual suspects.

I’m pretty sure you have had more the 2 beers. Do you really think that the comment section would be jammed up with gloating for a minor price increase? Is that how you see the gloating on here? Because if this was a post about Google stock dropping again that would fill the comments.
Besides, you do know we live in “the west” right.
“Existing-home sales in the west increased 2.6 percent from November to December, down 0.8 percent year-over-year with a median sales price that’s up 0.3 percent.”

re: two beers’ comment. This is a meme that bloggers won’t let go of. Check out sfgate any time there is any real estate story. It’s rife with the “shadow inventory” crowd. Never mind the fact that SF didn’t have the foreclosure rate that other cities did. Somehow in their reasoning, banks are equipped to adequately manipulate real estate markets. Even though they can look at every REO listing that’s ever on the market and witness for themselves the shoddy photography.

[anon.ed], sure, blog commenters can look at every REO listing that’s ever come on the market. But that isn’t enough to discern the size of shadow inventory, because just as the “crowd” have said (not that I can speak authoritatively for the commenters on SFGate.com), for all practical purposes banks have essentially unlimited flexibility on when and how they place properties they’ve foreclosed on on the market.
It seems to me that to really get at the shadow inventory, as a first approximation, you’d need to keep a running list of every home that’s had a notice of trustee sale posted and then compare that to the list of REOs that have been put up for sale, and the Boolean difference is the set of homes that are shadow inventory.
Then you’d have to add back those homes which have been taken back by the bank after auction. Then you’d have to add back those homes which were sold out of REO status but then failed for whatever reason to close escrow. Subtract those properties which their defaults cured. And so on.
It’d be dooable but not as trivial as you suggest.
The simplest and best solution would be regulatory. The Fed or the OCC would just require banks to disclose in their quarterly reports which homes/properties are in their possession and their marked-to-market value.

Granted, that’s just an anecdotal way to gauge that banks aren’t very good at controlling real estate. But do you have anything to say about the other aspect I mentioned, which is that SF didn’t see the same level of foreclosures as other cities? Therefore “shadow inventory” even if brought into full bore, might be more muted?
I’ve seen numerous articles cite that fact. Here’s an outtake from a book on the subject, “Foreclosing the Dream.” Fact: In the states most affected by foreclosures (such as California and Florida) “drive to qualify” middle-class outer suburbs had far more foreclosures than urban counties. In Northern California, only 0.2% of San Francisco’s housing units were in foreclosure or preforeclosure status, as opposed to 3.3% in Contra Costa County and 3.7% in Solano County. In fact, San Francisco had the lowest foreclosure level of any San Francisco-area county. Alameda County (which includes Oakland) had a less impressive 1.8% foreclosure rate- but even that rate was below not only the suburban counties mentioned above, but the statewide average of 2.5%. Similarly, in Southern California, Los Angeles County’s 1.4% foreclosure rate was far below that of drive-to-qualify Riverside County (4.4%) and San Berardino (4.0%).
Or this, from the LA Times citing DQ: http://articles.latimes.com/2011/apr/20/business/la-fi-foreclosures-20110420
“Mortgages were least likely to go into foreclosure in San Francisco, Marin and San Mateo counties, DataQuick said. Mortgages with the highest likelihood of going into foreclosure were in Tulare, Madera and San Joaquin counties.”

Sure, I’ll concede that The City has had fewer foreclosures than say, Brentwood and Antioch (“…3.3% in Contra Costa County…”) in absolute terms.
I still think that banks are very good at holding properties off the market, and whether this is just the result of bank personnel being overwhelmed or through conscious strategies to decelerate price level drops and the concomitant increase in mortgage loan losses which affect lender bottom lines (and thereby pay to bank personnel) shadow inventory is a very real phenomenon in the country at large, if not San Francisco proper.

Here’s the point about foreclosures in the outer burbs — they’re being scooped up and the big boys have come to play. It IS different here (how many other metro regions can do this?) I still think we’re a ways from equilibrium, so it’ll be interesting to see how this all works out.Waypoint Real Estate Group – which buys, renovates and rents out distressed single-family homes, primarily in hard-hit Contra Costa and Solano counties – has just received a capital infusion worth $250 million from GI Partners, a private equity firm headquartered in Menlo Park.

Fact: In the states most affected by foreclosures (such as California and Florida) “drive to qualify” middle-class outer suburbs had far more foreclosures than urban counties. In Northern California, only 0.2% of San Francisco’s housing units were in foreclosure or preforeclosure status, as opposed to 3.3% in Contra Costa County

Of course, “not as many foreclosures as Contra Costa” is a far cry from “good market.”
SF still saw 162 homes foreclosed in Q4 2011, a little worse than last year (just about the only county that saw more than last year). And, of course, there were lots of short sales on top of that which prevented an REO. And there were 405 NODs in Q4 2011, a little better than last year.
SF does not have a very high a volume of purchases. While REOs may not be the norm, they are still at levels that would have been considered inconceivable a few years ago, and they certainly drive prices down and reflect the weak market. As I have said before, there are only degrees of bad right now. “Less bad” does not equal “good.”http://www.dqnews.com/Articles/2012/News/California/CA-Foreclosures/RRFor120124.aspx

One was ’08 data, one was 2011 data. And is it held out longer or held out ? Because you say rich areas and that’s precisely the point. Folks with more capital can stave off foreclosure better if they choose to do so.

two beers wrote: At this rate, it could take DECADES until housing recovers.
vis a vis the national housing market, a slightly different take from the perspective of the non-distressed supply-side, via the economix blog of the New York Times, Signs of a Bottom in Housing:

The 583,900 housing units completed in 2011 is still the lowest number on record, but multifamily construction activity is starting to increase. Construction started on 606,900 units during the year, exceeding the totals in 2009 and 2010…there is growing sentiment among home builders and economists that the bottom has been reached and construction will increase in 2012. Builders are securing more permits, and the pace of housing starts rose in the fourth quarter.

Emphasis added. This prediction will be interesting to revisit next January when the supply numbers for 2012 are in.

The only people in SF who get foreclosed on are those who deserved to lose it all, e.g., “overpaid”, or bought on “busy street”, not in The Real SF, District 10 or 3, “flawed property”, now-stale “new condo smell”, bad floorplan, etc., etc….